More than one million council workers have been offered their first pay rise in three years, with a proposed increase of 1%.
Local authority employers said the offer to workers in Wales, England and Northern Ireland was the best they could make in the face of "significant" spending cuts.
Unions have been pressing for a "substantial" increase, with no strings attached, complaining that council workers were at "breaking point" over pay.
The 1% offer, the first since 2009, when a three-year pay freeze kicked in, covers employees earning at least £12,145 a year, but does not include teachers, firefighters and council chief executives.
The offer would add more than £150 million to the paybill.
Sian Timoney, who chairs the employers' side, said: "Councils have been consistently clear that our hardworking employees should receive a pay offer this year. This is the best offer possible in light of significant cuts to council funding. It is fair to taxpayers and fair to our employees and recognises the financial pressures they are under.
"However, I am very disappointed that the unions have rejected our repeated attempts to discuss terms and conditions to ensure they are fair and appropriate for councils and their employees.
"There have been no significant changes to terms and conditions since 1997. Local government needs a modern and reformed employment framework for the future and this will remain a priority objective for the sector."
Heather Wakefield, Unison's head of local government, said: "Local government workers have seen a 16% decline in the value of their pay in the last three years, coupled with significant local attacks on terms and conditions.
"Unison's local government committee will be mindful of this when we consider this improved offer. We held out for a better deal and will now be consulting our local government members, the majority of whom are women who have been particularly hard hit by the coalition's cuts to jobs, services, pay and conditions."